Convenience Store Decisions, October 2018

FRONTEND Profile We are aggressively expanding in the U S In 2017 we achieved ubiquitous coverage across Canada and not that were finished growing but its the initial completion of our footprint in the Canadian market meaning you can start in New Brunswick and drive all the way to Vancouver across all of Canada and never stop anywhere else except one of our stores Doug Haugh president Parkland USA We are aggressively expanding in the U S In 2017 we achieved ubiquitous coverage across Canada and not that were finished growing but its the initial completion of our footprint in the Canadian market meaning you can start in New Brunswick and drive all the way to Vancouver across all of Canada and never stop anywhere else except one of our stores Haugh said Parkland now has its sights set on investing in the U S and growing a national business across the country within the next five to 10 years Parkland first entered the U S market with the acquisition of SPF Energy Inc the parent company of Farstad Oil Inc and Superpumper Inc in 2014 which gave it a presence of about 20 stores in North Dakota Today Parkland operates 30 stores in the Dakotas and supplies almost 200 locations across Montana North Dakota South Dakota and Minnesota The Reinhart Oil Co acquisition allowed Parkland to extend its footprint into the Rocky Mountain region If you look at demographics and gross domestic product its an extremely attractive market Denver and Salt Lake City are two of the fastest growing metro areas in the country Theyre young demographically which skews to a great market for c stores and theres a lot of strong organic growth opportunities and new to industry development opportunities in those markets which we like said Haugh Its also contiguous to Parklands other U S operations There are some leadership and management synergies there in terms of running a business close by The environment is also similar to Canada As far as beginning operations in the U S we thought to go where its most familiar to our current operations as opposed to jumping into Miami or southern Louisiana or someplace very different culturally and in terms of selection and far from our supply capabilities said Haugh As Parkland grows it expects to first expand adjacent its refinery in Burnaby Canada which offers tremendous supply assets Wed certainly like to have some additional demand downstream of those assets Haugh said From there the president sees the company pursuing opportunities across the Great Plains from Denver East to St Louis But future opportunities also exist up and down the Rocky Mountain region from Montana down to Mexico In other words opportunities for the progressive convenience chain seem far and wide MVP TREATMENT The MVP acquisition adds three bulk plant terminals colocated with cardlocks six c stores and 19 branded dealers across North Dakota Plus a fuel distributorship that sells 84 million gallons of fuel and petroleum products annually In North Dakota were No 1 in that market in terms of overall volume and volumetrically MVP is No 2 Theres a lot of opportunity to combine our strengths in those areas Haugh said Parkland has a strong commercial fuel business across Canada but the MVP acquisition allows it to grow its commercial propane operating capabilities in the North Dakota market Haugh anticipates more acquisitions before the end of 2018 as well as in 2019 Were not just the largest fuel supplier in Canada we run a really good collection of retail operations and we think were doing the right things now to turn that into a fantastic chain operation Haugh said Parkland Haugh stressed is not just one product line or one business line Its committed to the retail business the commercial business and the supply business If you look at those three areas of strength thats a lot different than other consolidators who only want to buy a piece of the business We dont want to bust up a company and sell off the pieces or break up the team he added That difference has resonated with companies such as Reinhardt and MVP which are long term family owned businesses Haugh said Their employees mean a lot to them They want to make sure theyre in the right organization with a holistic team that can come in and really contribute he said And thats what we are 16 Convenience Store Decisions October 2018 cstoredecisions com

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